From Government of Indonesia

Bill Ends Govt. Railway Monopoly

The House of Representatives on Tuesday (27/3/07) approved the railway transportation bill, allowing the private sector to take part in the rail industry.

All 10 factions of the House supported the bill in a plenary session in an effort to reform the public transportation system in the country, reported The Jakarta Post.

They said the rail industry has to become more competitive but continue to provide cheap transportation.

The bill allows the private sector, including multinational corporations, to take part, along with state-owned PT Kereta Api Indonesia (KAI), in providing rail transportation and the manufacture of support facilities. It requires the government to issue a regulation on the detailed participation of the private sector in the rail industry.

Putra Jaya Husein, spokesman for the House’s National Mandate Party faction, said that despite the private sector's participation, the government remains the sole authority in setting train fares to ensure a cheap service.

"PT KAI and private providers must make a profit to let them survive, but the government is required to give subsidies to ensure cheap rail transportation for the public," he said.

The Indonesian Democratic Party of Struggle (PDI-P) asked the government to issue regulations to govern the involvement of the private sector in public and special rail transportation.

"Private corporations should be encouraged to provide rail transportation for destinations with a high load factor and to invest in special rail transportation to create a healthy competition with PT KAI," PDI-P faction spokesman Rendi Affandi said.

Special rail transportation systems carry cargo and raw materials in industrial zones in Java, Sumatra and Kalimantan.
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